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You should read each of these Risk Disclosures carefully before deciding to purchase the Tokens.
Risk of Losing Access to $LCAI Due to Wallet Incompatibility
A valid Ethereum address from an ERC native token-compatible wallet is required to receive your $LCAI. Non-compatible wallet addresses will not be accepted. In addition, the Ethereum address used must not be associated with a third-party exchange or service that has custody over the private key. You must own the private key if your address is an exchange address.
Risks Associated with the Ethereum Blockchain
$LCAI operates on the Ethereum blockchain. Any malfunction, unintended function, unexpected functioning, or attack on the Ethereum blockchain may cause the Lightchain Protocol or $LCAI to malfunction or behave unexpectedly. Ethereum may be targeted by malicious attacks aiming to exploit weaknesses in the software, potentially resulting in the loss or theft of $LCAI. Examples include double-spend attacks, 51% attacks, or other security threats, which could adversely affect the Lightchain Protocol and the utility of $LCAI.
Risks Associated with Purchaser Credentials
Any third party that gains access to or learns of your wallet credentials or private keys may control your $LCAI. To minimize this risk, you should safeguard against unauthorized access to your electronic devices. Best practices dictate safely storing private keys in backup locations geographically separate from the working location. Additionally, providing us with the correct token receipt address is your responsibility. We are not liable for any loss of $LCAI if you provide an incorrect token receipt address.
Governance Rights Are Subject to Certain Limitations
The Tokens only confer governance rights regarding certain matters related to the Lightchain Protocol and are subject to limitations. They provide no governance rights with respect to Lightchain itself or its affiliates. Lightchain is not required to implement any proposal that poses an unreasonable risk of violating legal requirements or security risks, as defined in the Lightchain’s bylaws or community guidelines.
Tokens Provide No Rights Beyond Governance
The Tokens are solely for governance of the Lightchain Protocol. Token holders have no economic or other rights concerning the Protocol or the Lightchain. Accordingly, you should have no expectation of profit from the success or failure of $LCAI, the Lightchain Protocol, or the Lightchain. Economic benefits from the Protocol are expected to accrue to the Lightchain, platform users, service providers, or others. Purchasing the Tokens should be based solely on a desire to participate in governance, not on any specific rights or features.
Risk of Insufficient Participation in Governance
Token holder governance requires a minimum quorum of 1% of the total votable Token supply for proposals to be effective. Insufficient participation may render proposals ineffective, even if enacted. The Token Sale does not require a minimum number of Tokens to be purchased.
Risk of Declining Interest in Governance
Interest in participating in governance through the Tokens may decline over time due to limited participation, dissatisfaction with governance decisions, or other reasons. Your decision to purchase the Tokens should not be based on expectations of increasing value or sustained interest.
Risk of Changes to Governance Rights
Token holder proposals may lead to changes in the governance rights of the Lightchain Protocol. The Lightchain is not responsible for such changes.
Risk of Larger Holders Influencing Governance Decisions
All $LCAI have equal voting power, but no wallet may vote more than 1% of the total Token supply. Despite these restrictions, coordinated efforts by holders may exceed the threshold. This could lead to larger stakeholders exerting undue influence on governance decisions.
Dependence on Third Parties for Governance Functionality
Participation in governance requires access to third-party services, such as forums and voting platforms. If these services become unavailable, your ability to participate in governance may be limited or interrupted.
Risks and Uncertainty of Classification of Digital Assets
Regulation of tokens, cryptocurrencies, blockchain technologies, and exchanges is rapidly evolving and uncertain. Future laws or regulations may adversely impact $LCAI and the Lightchain Protocol. If $LCAI were deemed securities, additional restrictions may apply, affecting their use and resale.
Risks from Taxation
The tax treatment of $LCAI is uncertain. You should seek professional tax advice regarding acquisition, storage, transfer, and use of $LCAI, as adverse tax consequences may apply.
“As-Is” Status of Tokens and Protocol Proceeds
The Lightchain Governance Platform is offered “as-is” without further development. Proceeds from the Token Sale will be allocated to operational expenses and contingent obligations, not to developing or enhancing the governance functionality.
Risk of Malfunction or Security Weaknesses
The Lightchain Protocol may experience malfunctions or vulnerabilities, including service attacks or bugs. Such issues could result in loss of Tokens or inability to participate in governance.
Risk of Advancements in Cryptography
Breakthroughs in cryptography, such as quantum computing, could render the Ethereum blockchain or $LCAI’s cryptographic mechanisms ineffective, potentially compromising Token security and utility.
$LCAI Are Nontransferable
$LCAI are non transferable and cannot be resold. Do not purchase $LCAI as an investment or with the expectation of resale or profit, $LCAI may be traded and sold on exchanges once the presale has concluded.
Risk of Additional Token Issuances
The Lightchain reserves the right to issue other tokens in the future with different features or functionality, which may affect the utility or governance of $LCAI.
Risk of Unknowable or Unfavorable Regulatory Development
Future regulatory developments could adversely affect the adoption and utility of $LCAI and the Lightchain Protocol. This includes domestic or international actions that impose additional restrictions on token functionality or governance.
Risk of Security Weaknesses in Core Infrastructure
The Lightchain Protocol relies on open-source and proprietary software, which may contain vulnerabilities. Such vulnerabilities could harm the Protocol’s reputation, reduce user activity, or lead to significant disruptions.
Risks Associated with Data Privacy Laws
Data protection laws may affect the Lightchain Protocol’s operations. Breaches in data security could harm the Protocol’s reputation, leading to reduced user confidence and utility.
Risks of Indemnity Obligations
The Lightchain’s indemnity obligations may adversely impact its financial stability. The governing documents of the Lightchain limit liability for directors and officers but require indemnification under certain circumstances.
Risk of Loss of Key Personnel
The success of the Lightchain Protocol depends on key individuals. Loss of these individuals could negatively impact operations, governance, and the Protocol’s overall success.
Unanticipated Risks
As cryptographic tokens are a nascent technology, unforeseen risks may emerge, including combinations of known risks or entirely new threats.
Disclosures About Risks Related to the Lightchain Protocol
You should not purchase Tokens based on expectations about the success, features, or functionality of the Lightchain Protocol. If these expectations motivate your decision, you should refrain from purchasing Tokens.
The Lightchain Protocol’s features are subject to change, and unforeseen circumstances may arise. The Lightchain will determine the scope and implementation of changes to the Protocol’s functionality and governance. Third-party dependencies and regulatory uncertainties may impact the Protocol’s success.
The Protocol’s long-term viability is not guaranteed, and potential risks include operational challenges, reputational harm, and regulatory constraints. Your purchase of $LCAI should reflect a desire to participate in governance without expectation of financial gain.